Those looking for evidence that a comeback is under way in the local real estate market need look no further than the latest statistics from the Northwest Multiple Listing Service (MLS).
For March, the MLS reported that homes sales in Seattle were up a stunning 62 percent over the same month in 2009, and pending home sales (where contracts have been signed but the deals have not yet closed) were up a comparable 58 percent. Pendings are regarded as a good indicator of future events, so there’s reason to hope that the new trend line is sustainable.
The median price of a Seattle home sold in March was 3.2-percent higher than a year earlier, lending credence to the idea that Seattle is finally out of the trough. We were late, relative to other regions, in taking the real estate plunge, and we’re also later than some areas in the timing of our recovery.
Just to put our market into perspective, however, it’s worth noting that many parts of the country — including Las Vegas, Phoenix and parts of California — continue on a downward trajectory.
The local market The news for our little part of town is even better than for Seattle as a whole. The MLS area that includes Madison Park, Capitol Hill, Montlake and Madrona experienced a 103-percent surge in home sales, March-to-March, and a 77-percent increase in pending home sales. Not bad.
Madison Park home sales, which had been averaging only 2.5 per month during the fall and winter of 2008-2009, have averaged eight per month during the same period this year. The number of homes actively listed shows a similar roller-coaster effect, moving from 71 listings in April 2008 to a peak of 116 in July 2009. Inventory has begun to climb again after hitting a recent low of only 67 listings in January.
The relationship between home sales in the Park and the total number of listings has also moved back into line. In March 2008, we actually had a 38-month supply of homes. By last month the absorption rate had fallen to only eight months, more in line with historic patterns.
Strong movement We’ve been reporting for several months that the under $1 million market appeared to be recovering rapidly. The problem for Madison Park is the rarefied nature of our market, with the median list price of for-sale homes hovering around $2 million for at least the past year.
There have been few under-$1 million buying opportunities in our market in recent months, leaving a lot of expensive inventory just sitting. This began to change toward the end of last year, and there now appears to be strong movement, at least at the lower end of the upper market.
Lincoln Thompson, an associate broker at Windermere Real Estate-Madison Park, believes that the dam has finally broken, at least for the $1 million to $2 million segment. He provided me with some recent statistics that show a downward trend of inventory and a significant increase in pending sales.
In June 2009, there were 57 of these pricier homes on the market in the 98112 ZIP code area, with just three sales and one pending sale.
In March 2010, the market was down to 32 listings, with four sales and 16 pendings. If all of the pendings close, the market will be halved for that segment, assuming no new listings.
Overall, there have been a significant number of new listings in Madison Park during the last 30 days. Redfin, using data primarily from the MLS, reports 21 new listings, which is certainly a record monthly increase for the last year or more.
Some sellers clearly perceive that the market is on the move and now is the time to take advantage. Financing is reportedly loosening up, and rates remain relatively low.
Still a bad market This is all to the good, but the simple fact remains that it will take years for a full recovery to the pre-2008 price levels. In a report on the Seattle real estate market in February, Stan Humphries, Zillow’s chief economist, noted that Seattle remained one of the “bad” markets in the “good, bad and ugly” continuum.
The Zillow Home Value Index for Seattle fell 20 percent from the peak of the market. Zillow this month shows a 7.1-percent decline in home values for just the last year, so the rate of decline was already moderating before the recent evidence from MLS of an uptick.
Madison Park, meanwhile, has been down about 17 percent from the peak, according to Zillow. So if the question is “Are we there yet?” the answer is certainly “no.”
BRYAN TAGAS is Madison Park resident and corporate banker who also writes the Madison Park blog (www.madisonparkblogger.com), from which this column was excerpted. Thanks to Wendy Skerritt of Windermere Real Estate for some of the sales data cited in this column.[[In-content Ad]]
